“There is no question that America’s tax and expenditures systems are biased in favor of consumption. Savings are taxed as income, many forms of consumption such as health care are untaxed, and other forms of consumption such as housing are given large tax breaks. Legislators love talking about changing the system to reward saving and investment. Tax cuts are often justified as incentives to save — but in reality they seldom are. Just lowering taxes, as was done under the Reagan administration, for example, simply left people with more after-tax income to spend on consumption — which is what they did and savings rates actually went down. If more savings are desired, the right technique is not tax breaks for income but tax penalties on consumption that rise as consumption rises. Yet serious legislation to shift from a system of taxes on income to a system of progressive consumption taxes is conspicuous by its absence,” p. 301-302